Bangladesh Bank (BB) has directed banks/financial institutions to provide special loan/investment facility to revive cottage, micro, and Small and Medium Enterprises (SMEs) that were affected financially due to the outbreak of Novel Coronavirus. The institutions have also been urged to disburse loans in the shortest possible time by adopting the simplest procedure possible in all steps from receiving application to loan disbursement.
BB also directed to transfer all imposed/ imposable interest/ profit on all types of loans/investments facilitated between 01 April 2020 and 31 May 2020, to interest-free blocked accounts. The interest/profit transferred as blocked cannot be acquired from the respective loan/investment recipient till further instruction and such interest/profit cannot be transferred to bank’s income book. Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) believes the business community will particularly be benefited from the facility. The central bank took the initiative following the FBCCI's proposal regarding easy loan access by entrepreneurs in the CMSME sector.
As per the instruction, separate help desks will be set up in each branch of the bank/financial institutions to assist the entrepreneurs so that information about financial aid packages can be found easily. The institutions will form monitoring teams at their respective head offices to properly supervise loan/investment disbursement activities and to inform the names, phone numbers, and e-mails of the entrepreneurs to the in-charges at the SME and Special Programmes Department. Besides, they were also instructed to receive assistance from FBCCI and its affiliates in selecting borrowers, disbursing loans, supervising lenders, and including personal, social, and group guarantees instead of collateral to avail the entrepreneurs while taking loan/investment benefits.
On April 5, Prime Minister (PM) Sheikh Hasina declared a financial assistance package of Tk 20,000 crore to introduce low-interest on working capital loan/investment facility through the banking system to retain the capacity of CMSME entrepreneurs affected by the coronavirus and to keep the manpower working. In light of the PM’s announcement, FBCCI President Sheikh Fazle Fahim submitted a proposal to BB to make the loan/investment disbursement process easier for the entrepreneurs of CMSME as well. He also urged for an easy access to credit for all media outlets. Fahim assured that FBCCI would remain involved in the loan/investment process and would always strive to revive the economy by providing all possible assistance in case of any problem.
He said, “Most of the CMSME entrepreneurs, entitled to have the current capital loan/investment facility, have minimal infrastructures and relationship with bankers than those of the others. As a result, if these entrepreneurs were selected upon reviewing their basic standards, financial statements and ICRRS, many would fail to meet required qualifications to avail the loans and investment benefits. Meanwhile, if the loan amount is not determined and the demand is not coordinated with it, we will not get desired results.”
The PM has already allocated Tk 70,000 crore as refinancing for the smooth implementation of loan/investment and other facilities under various financial assistance packages, announced so far, to keep economic activities uninterrupted during the Coronavirus pandemic, he added.
The FBCCI president expressed gratitude to the PM and Finance Minister AHM Mostafa Kamal for the initiative.
The FBCCI proposal included that CMSME organisations such as trade, factory, shop, dealer, retailer, distributor, pharmacy, restaurant, petrol pump, travel/tourism/resort, transport, fashion house, beauty parlour, women entrepreneur, saloon, small cottage and middle industry could avail the facility if recommended by the respective district chamber. Necessary recovery time will also be provided by the association.
Fahim called upon the individuals and organisations to inform FBCCI if any bank or financial institution does not provide proper assistance to them The FBCCI will also monitor the implementation of these guidelines, he said.
Meanwhile, a demand was also raised to facilitate media, newspapers, TV, trucks, cargo, launches, and backward exports, with the loan/investment facility on the basis of salary statements and as per the advice of the association concerned.